The process of transferring patients with mental disorders or developmental disabilities from long-term institutions, which isolate the patient, to more integrated community-based mental health services. A significant deinstitutionalization movement began in the United States in the late twentieth century.

Example: A schizophrenic woman had lived in her state’s mental hospital for all of her adult life when it was shut down in the late 1960s. She was placed in a group home and goes to a community center daily to receive her medication.